Lankem makes mandatory offer to acquire ACME Printing
Lankem Ceylon PLC (LCEY) has made a mandatory offer to acquire the remaining ordinary voting shares of ACME Printing and Packaging PLC (ACME).
LCEY has, in accordance with its obligations under Rule 31 (1) (a) of the Company Takeovers and Mergers Code 1995, made an offer to the remaining shareholders of ACME, to purchase the balance ordinary voting shares in issue of 27,921,829 (67.83 %) at a price of Rs. 12.20 per share.
Over the past 12 months, LCEY has increased its shareholding in ACME by 3,235,795 shares and as of 16 September 2021, holds 7.86% of the total number of ordinary voting shares in issue of ACME.
Over the same period, other parties affiliated with LCEY have also increased their shareholding in ACME. Accordingly, LCEY Chairman S.D.R. Arudpragasam has increased his shareholding to 2.51% of the total shareholding in ACME, its parent company Colombo Fort Land and Building PLC to 0.05%, and other related affiliates such as E.B. Creasy and Company PLC (19.97 %), Union Commodities (Pvt.) Ltd. (1.42%), Colombo Fort Investments PLC (0.19%), and Colombo Investment Trust PLC (0.17%) have also increased their respective shareholdings.
As a result, LCEY and other parties acting in concert, held 13,240,084 ordinary voting shares in ACME, constituting 32.17% of the total shares in issue as of 16 September 2021.
Therefore, LCEY is obligated to make a mandatory offer under Rule 31 (1) (a) of the Company Takeovers and Mergers Code 1995 which imposes such an obligation where any person and such other persons actioning in concert, acquire by a series of transactions, 30% or more of the voting right of a company.
The offer price of Rs. 12.20 per share by LCEY was derived from the fact that it was the highest price paid by LCEY for the acquisition of the shares of ACME during the period from 17 September 2020 to 16 September 2021.
However, LCEY made an application to the Securities and Exchange Commission (SEC) on 16 September 2021 to revise the offer price to Rs. 12.00 on the ground that the transaction at the higher price of Rs. 12.20 was only for a very small number of shares (50,601).